IRS loophole for illegals’ children costs taxpayers billions

“The law has been clear for over a decade that eligibility for these credits does not depend on work authorization status or the type of taxpayer identification number used,” the statement reads. “Any suggestion that the IRS shouldn’t be paying out these credits under current law to ITIN holders is simply incorrect. The IRS administers the law impartially and applies it as it is written.”

The WTHR investigation has brought increased scrutiny on the IRS by Congress. Indiana Republican Rep. Dan Burton has co-sponsored a bill that would only make the additional child tax credits available for U.S. citizens.

“We’ve got to deal with it,” Burton said. “I knew this was a problem, but until hearing what you found, I didn’t know it was this severe.”

The bill has sat idle in the House Ways and Means Committee for almost a year, but the language from the bill is now included in proposed budget savings measures that lawmakers are expected to consider in May.

The budget package, including the tax credits adjustment, is expected to die in the Democratic-controlled Senate.

A few Democrats have, however, come out in support of the Burton bill. Democratic Sen. Claire McCaskill sent a letter to IRS Commissioner Douglas Shulman saying, “stopping unauthorized voters can and must happen immediately.”

“This should not be a partisan issue because we’re all concerned about saving taxpayer dollars and not wasting them on fraudulent things like this,” Burton said.

Despite lawmakers’ outrage, many immigrants do not want their benefits to disappear.

“It’s not taking advantage. I’m very thankful to this country for the help it gives me,” said one illegal immigrant in central Indiana.

“Who’s going to help them if they’re not eligible … to avoid them ending up in the drug mafia, begging in the street, being raped? What happens when they get sick?” he continued.

Taking away the ability of illegal immigrants to obtain tax credits could hurt their children living in the U.S. The children are citizens if they are born in the U.S., but would be unable to receive tax credits under the proposed bill in Congress.

But systemic abuse is a concern that the inspector general and Congressional Republicans find most troubling.

“It’s being abused by people who are not entitled to use it, and that’s problematic,” George said.

“It’s cheating the American taxpayer,” Burton agreed. “We all believe in humanity and humanitarianism, but we’ve got a $15 trillion national debt. We can’t subsidize the whole world.”

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